The History of Cryptocurrency
Cryptocurrency has an incredibly polarising reputation. To its increasingly large band of adopters, cryptocurrencies represent the future of finance and the solution to the increasing inflation that is resulting in a cost-of-living crisis in the Western world.
To its detractors, cryptocurrencies are overhyped scams shilled by influencers for a fast buck and offer nothing more than a technological gimmick.
The truth is likely somewhere in the middle of those two opposing views, and only time will tell, which is ultimately closer to the mark.
However, what everyone can agree on is that cryptocurrencies feel as though they have emerged from nowhere to land in the mainstream. This is why it is useful to learn more about the history of cryptocurrency. It will help lend context to the current technology, why it exists in the first place, and whether it does indeed represent the next chapter in the financial history of the world.
From the beginnings of bitcoin to the enduring proof of work versus proof of stake argument, this is a brief history of cryptocurrency:
Bitcoin established the modern cryptocurrency
The origin of the modern cryptocurrency as we know it can be traced back to bitcoin.
Bitcoin was quietly created by a pseudonymous individual or group called ‘Satoshi Nakamoto’ in 2009. Buried in the noise of the global financial crisis, bitcoin offered a self-professed antidote to the problems of the contemporary financial system. Namely, third-party institutions such as governments and banks had too much power over the fate of currencies (and, therefore, entire economies).
Bitcoin, built on a dedicated blockchain network, does not require any third-party intervention. It is kept online by countless nodes positioned worldwide, making it technically far more secure than any traditional currency.
Just thirteen years since bitcoin’s invention in 2009, over 9,000 cryptocurrencies are currently in circulation as of 2022.
Of course, by far the second most successful cryptocurrency behind bitcoin is Ethereum - which was initially released in 2015 by a team led by Vitalik Buterin.
Ethereum, unlike bitcoin, is more concerned with the potential to build projects on top of a blockchain (thereby creating the fundamentals of Web 3.0) rather than using it to create the strongest currency on earth.
Despite this, the native ETH token is in demand, and the Ethereum current price at OKX remains competitive.
Digital currencies are nothing new
Despite the rapid rise of modern cryptocurrencies, it is worth pointing out that they are nothing particularly new.
While the hard edges of the technology are quickly being whittled away, the idea for a decentralized digital currency can be traced back to the Eighties, when cryptographer David Chaum published a conference paper sketching out the idea of a cryptographic currency. He later created Digicash, which built upon his initial ideas.
Bit Gold was also invented around this time. Designed by Nick Szabo, it is commonly regarded as the direct ancestor of Bitcoin but was not ultimately successful.
However, it was Bitcoin itself that first created the cryptocurrency market we know today.
